GST bill introduced in RS; Jaitley vows passage next year

Finance Minister Arun JaitleyThe long-awaited GST (goods and services tax) bill was introduced in the Lok Sabha today, with finance minister Arun Jaitley saying the concerns of all the states have been addressed, and they would benefit from the ''win-win'' measure.

Jaitley said the Constitution (122nd Amendment) Bill will be taken up in the next session of Parliament, and that he will be open to all suggestions ''till the very last minute''.

The GST, first proposed by the previous Manmohan Singh government, has been lagging because it needs an amendment to the Indian Constitution, which requires a majority of state governments to be on board.

Introducing the bill, which was cleared by the union cabinet on Wednesday, Jaitley said, ''We have made sure that no state will lose a rupee of revenue. It will be a win-win situation.''

Jaitley said states would be compensated for loss on account of CST, and the first installment would be made before 31 March next year.

Speaking on the bill in Rajya Sabha, Jaitley said the states' interests are more than adequately protected, and that he did not see states being the losers.

The GST will incorporate indirect taxes like excise duty and service tax on the central front and VAT on the states level, besides local levies. There are differences between the centre and states on some issues with regard to the implementation of GST that includes the revenue neutral rate and keeping petroleum, liquor out of the ambit.

Jaitley said the government would give ''constitutional assurance'' in terms of compensating the possible losses incurred by states.

The GST reform would strengthen the principle of ''co-operative federalism'' as the centre and states would need to work together to take decisions, which would require 75 per cent majority approval, the finance minister said.

As some members questioned the hurry and wanted the crucial legislation to be sent to the Standing Committee, Jaitley contended that the government's intention was not to ''push'' or ''rush'' the bill through.

''Let there be no tax on tax. If you have multiple taxation, the burden and procedural complication increases. One legitimate fear is there and therefore I am not going to rush through with this, though the Standing Committee has cleared it and I have discussed it repeatedly and Chidambaram has discussed it repeatedly,'' he said, acknowledging the role of P Chidambaram of the Congress, his predecessor as finance minister.